The Most Exciting Company in the World
But China's BYD passes over business grads in favor of "practical" migrant labor

The Chinese electrical car and battery maker BYD is the most exciting company in todayâ€™s economy according to Harvard professor Warren McFarlan, but business grads will be hard pressed to find a job there.

BYD (Bi Ya Di or Build Your Dreams) is a pillar of the Chinese manufacturing scene. Last fall, its CEO Wang Chuan-fu turned down Warren Buffetâ€™s offer to buy 25 per cent of the firm. He later agreed to sell Buffet a ten per cent stake for $230 million, which Buffet saw as a â€œgood signâ€.

Wang started BYD in February 1995 as a small battery supplier in Shenzhen, a free enterprise zone in southern China. Today the company makes 65% of the worldâ€™s nickel-cadmium batteries and has130,000 employees in eleven factories worldwide, producing cellphone handsets for popular models including Motorolaâ€™s RAZR and the iPhone. Its revenues have more than quadrupled in the past five years.

In an interview with Fortune magazine in April, Wang claimed that the firmâ€™s â€œhuman resources advantageâ€ is the most important part of its strategy. According to Wang, BYD has thrived through the downturn because it can use Chinaâ€™s abundant, low-cost, tech-savvy skilled workers. In a move down the technological ladder, Wang has cut production costs by replacing expensive Japanese robots with Chinese migrant workers, monitored against strict quality control standards.

And it seems that low-cost Chinese workers beat blue sky-thinking business graduates. After three days of calling the companyâ€™s human resources division at its headquarters in Shenzhen, BusinessBecause reached someone who was willing to talk a little (but did not want to be named).

Asked about the relevance of business degrees to the companyâ€™s needs he said that since most positions are technical rather than managerial, MBA graduates are rarely considered. One of BYDâ€™s core values is to be â€œpracticalâ€, he emphasized. Instead of looking for highly educated people, the company puts its employees through rigorous internal training in engineering, management and languages.

Employees live in BYD-sponsored apartments, eat in BYD canteens, send their kids to BYD kindergarten, elementary and middle schools, and join in organized entertainment activities.

Seems an MBAâ€™s best shot at working for the worldâ€™s most exciting company could be teaching English at the BYD Staff Academy.

BYD Co. (BYDDF.PK), the Chinese automaker backed by Warren Buffet, announced Friday it will located its North American headquarters in Los Angeles.

The company aims to begin selling smal, all-electric hatchbacks to fleet operators in the US later this year. Retail sales to the public are expected in 2011, and the company said it will offer "several models" by the end of 2011.

The company will be in direct competition with Nissan's LEAF and Mitsubishi's i-MiEV. BYD said it intends to hire about 150 employees in Los Angeles.

BYD also plans to base its solar-panel division in Los Angeles, though no specific details were offered.

In addition, the company plans to sell large, iron phosphate batteries to US utilities for storing power. Senior Vice President Stella Li told reporters the company is in talks to provide a 10-megawatts battery to the Los Angeles Department of Water and Power. In this market, the company will be competing with GE (NYSE: GE) and Saft, both of which recently announced new utility-scale battery offerings.

In March, BYD and Daimler AG (NYSE: DAI) announced plans to develop a new electric vehicle for specifically for the Chinese market.

Read a the company profile for BYD, put together by the Progessive Investor newsletter.

China's BYD Selects Los Angeles as Automaker's North American Headquarters

By John O'Dell and Scott Doggett

Los Angeles Mayor Antonio Villaraigosa, California Governor Arnold Schwarzenegger and BYD Chairman Chuanfu Wang stood on the steps of Los Angeles' City Hall this morning and announced that BYD Auto, China's fastest-growing automobile manufacturer, will establish its North American headquarters in downtown L.A.

BYD, which stands for Build Your Dreams, is one of the first carmakers to come out with an electric-drive vehicle in recent years, introducing the F3DM dual-mode electric vehicle to the world in December 2008. BYD began offering the vehicle, the world's first mass-produced plug-in gas-electric hybrid, to the public in China this week.

Soon, the company will officially launch the e6, a battery-electric vehicle with a claimed range over 200 miles per charge.

"Installing a U.S. headquarters in Los Angeles well prepares us for distribution of our product throughout the United States and sets the stage for release of our all-electric crossover vehicle, the e6," Wang said.

BYD, which is also known for solar manufacturing, consumer electronics and environmentally-friendly energy storage chemistries, has the backing of respected billionaire investor Warren Buffett. His MidAmerican Energy Holdings Co., the utility division of his Omaha, Nebraska-based flagship Berkshire Hathaway, has a 9.9 percent stake in the Hong Kong-traded company.

Probably not coincidentally, the BYD line of vehicles is being shown starting today at Berkshire Hathaway's annual shareholders meeting to a worldwide audience of more than 10,000 shareholders.

Detroit Dreamin'?

Today's announcement regarding BYD's site of its North American headquarters is an important step in attracting green businesses to the City of Angels. It comes less than a month after Santa Monica, Calif., EV-maker Coda Automotive disclosed that it was in talks with the city about building a battery assembly facility on a 20-acre site within 5 miles of L.A.'s financial district.

And, the development comes only two weeks after BYD announced a partnership with KB Homes to build low-energy homes in the California city of Lancaster that would be equipped with solar panels and batteries. Wang said the company aims to cut the cost of solar panels by 10 percent a year to make them more affordable to the general public.

BYD spokesmen said the company expects to hire 150 people throughout 2010 and 2011 as it rolls out its fleet of vehicles to California markets first before expanding throughout the country. Eventually, if it continues to expand, BYD could employ up to 2,000 people in Los Angeles, Wang said. That expansion would likely include at least the partial assembly of vehicles.

"California's market-friendly energy and environmental policies are playing a vital role not only in making California more energy secure but also in bringing companies like BYD to our state," Schwarzenegger said.

"Like California, BYD is a company of firsts. They are leading China and the rest of the world into a cleaner, more sustainable future with their automobiles and renewable energy products while creating jobs and saving consumers money. I welcome BYD with open arms and look forward to growing California's relationship with China to mutually benefit the environment and economy," he said.

The headquarters for BYD will be located near the city's financial district on the site of a former automobile dealership. BYD has signed a long-term lease agreement and expects to take occupancy in the fourth quarter of this year.

Multiple Uses

BYD's green-energy technologies will be on display at its new headquarters and will feature its vehicles, solar panels, energy storage systems and advanced LED lighting products, Wang said. The building will also house BYD's research and development arm that will develop current versions of their popular vehicles selling in China for the U.S. consumer market.

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Left, the F3DM plug-in hybrid.
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BYD Senior Vice President Stella Li said Villaraigosa and First Deputy Mayor Beutner "personally made Los Angeles stand out among any other city as the optimal home for BYD North America, and I expect that other companies in China and throughout the world will come to the same conclusion that this city is the best place to build a green business."

This year, BusinessWeek ranked BYD as the eighth most innovative company in the world and Fast Company ranked it as the 16th most innovative company globally. It was the only automaker to make Fast Company's top-50 list.

BYD sold nearly 450,000 vehicles in 2009, up 170 percent from a year earlier. This year, the company expects to reach 700,000 in vehicle sales. BYD employs 130,000 worldwide in offices including the Netherlands, Denmark, Hungary, Romania, Japan, South Korea, India, Taiwan and Hong Kong.

BYD's decision to set up shop in the U.S. comes as no surprise. The company said long ago that it wanted to have a presence here.

The operation should provide a boost to the Southern California economy and the scores of auto parts makers - most of them small businesses - that call the region home.

Wake-up Call

It also should serve as yet another wake-up call for U.S. automakers. China expects to be the world leader in EV production and is going to aggressively market its electric-drive vehicles around the globe.

Companies without competitive products will suffer, badly, as demand for alternatives to internal-combustion-engine vehicles continues growing.

Chinese automakers like BYD know what Japan's automakers achieved in the past 40 years - largely with growth in North America at the expense of the domestic car companies - and there's no doubt that companies such as BYD want to be the Toyotas and Hondas of the 21st Century.

China's made no bones about the fact that they want to be number one in the EV world and you can't do that without pushing product into the U.S. market.

BYD is the first but by no means will be the last Chinese automaker to come to the U.S. The fact that they are backed by Buffett obviously gives them a leg up in approaching the U.S. market and building relatively rapid acceptance in the U.S.

The big challenge right now will be in producing cars that can meet the quality demands of the U.S. market at price points U.S. consumers will welcome.

Ford announced that Compact Power would be producing the batteries for its electric Ford Focus. (Source: Ford via Autoblog)

Obama was visiting Michigan today, promoting his plans to develop $10,000 EVs by 2015. (Source: Detroit News)President and his staff hit the road to promote the over $2.4B USD in federal money they're offering auto companies

U.S. President Barack Obama certainly isn't setting modest goals when it comes to electric vehicles. The President is taking a gamble, pouring over $2.4B USD into the budding industry. A 100-mile range battery EV today costs around $33,000 USD to make, but Obama hopes to drop that cost to $16,000 by 2013 and $10,000 by 2015.

President Obama was visiting Michigan this week to check in on many pending battery projects that are receiving a piece of that $2.4B USD pie.

Among the events he attended was the groundbreaking ceremony in Holland, Michigan of a Compact Power Inc. plant that will be used to provide batteries for the Chevy Volt. Compact Power, owned by South Korea's LG, announced news more big news at the ceremony -- Ford picked it to produce batteries for the plug-in Ford Focus.

The plant will cost $303M USD to build, but the government will be chipping in $151M USD. The plant is expected to employ 450 workers by 2013 according to the Obama administration. The jobs are expected to pay $14, providing a decent standard of living to workers.

Obama also checked out Johnson Controls-Saft's new $220M lithium-ion battery plant, also in Holland, Michigan. That plant may prove to be a key competitor to Compact Power in the near future, and is also receiving federal stimulus funding.

On Friday, Energy Secretary Steven Chu will visit Delphi Automotive in Kokomo, Indiana. Delphi is one of the auto industry's top suppliers. The U.S. government is offering it $89M USD in grants to develop new components for electric vehicles.

Meanwhile, Ed Montgomery, executive director of the White House Council on Automotive Communities and Workers, will be visiting General Motor's new plant in in White Marsh, Maryland. While GM will buy battery cells from suppliers like Compact Power, it will assemble its own battery packs and supporting systems in house at this new plant. GM is receiving $241M USD in federal funding for its EV efforts in total, including $106M USD towards this new plant.

Charlotte, North Carolina-based Celgard will be receiving a visit from Labor Secretary Hilda Solis. Celgard will receive $49M USD in stimulus money, which will allow it hire 100 employees, open a plant, and reach production.

While grants to promote the actual manufacturing of electric vehicles and their battery systems are one key aspect of Obama's efforts, another major component is the creation of electrical vehicle charging stations. By spreading EV chargers out like gas stations, the range of EVs can effectively be extended.

Companies like Coulomb Technologies will be deploying the stations across the country later this year and next year. New York-based Coulomb is receiving a $15M USD stimulus grant to spread 4,600 such stations in nine cities by September 2011. That's a big chunk of the 20,000 station Obama hopes to deploy by 2012 (there are currently 500 such stations in the U.S.).

The goals are lofty -- Obama is shooting for over 20,000 electric vehicle stations, 1 million EVs on the road, and bargain EV prices of $10,000 per vehicle by 2015. In short, he's trying to completely reinvent the American auto industry, much of which essentially collapsed during the recent recession.

BYD is also the most famous company in China。Chung Pak Battery is seems like the start of BYD. They produce button cell battery,carbon zinc battery,etc. Here is their website:
http://www.battery-products.com/

In other words they want to brainwash/indoctrinate them and micromanage employees 24/7 making sure they conform to groupthink and whatever the company views are as viable to their success. No free thinkers or potencial trouble makers allowed.

I would never buy an original Chinese owned and manufactured vehicle, after all the crap they sell that breaks in 6 months or less? I don't care how cheap it is initially in comparison to other vehicle makers.

Chinese owned/based companies on a whole need to completely revamp their quality controls in EVERYTHING before they can eliminate the stigma of poor quality and workmanship. Whether it is in technology, manufacturing or food. That will take at least another generation if not longer, if EVER.

"The object of life is not to be on the side of the majority but to escape finding oneself in the ranks of the insane." Marcus Aurelius, Roman Emperor and stoic philosopher, 121-180 A.D.

I had extensive discussion with Stella Li, the 2nd in command in BYD, years ago. She was competent but very arrogant. It is typical of companies that have been successful. You are blinded by your own success. You think you know everything when in fact you don't. (I know this problem all too well. I severed at senior level at Intel and it is just as bad, if not worse at Intel.) I knew they were going to run into problems and they are.

The Most Exciting Company in the WorldBut China's BYD passes over business grads in favor of "practical" migrant labor

The Chinese electrical car and battery maker BYD is the most exciting company in todayâ€™s economy according to Harvard professor Warren McFarlan, but business grads will be hard pressed to find a job there.

BYD (Bi Ya Di or Build Your Dreams) is a pillar of the Chinese manufacturing scene. Last fall, its CEO Wang Chuan-fu turned down Warren Buffetâ€™s offer to buy 25 per cent of the firm. He later agreed to sell Buffet a ten per cent stake for $230 million, which Buffet saw as a â€œgood signâ€.

Wang started BYD in February 1995 as a small battery supplier in Shenzhen, a free enterprise zone in southern China. Today the company makes 65% of the worldâ€™s nickel-cadmium batteries and has130,000 employees in eleven factories worldwide, producing cellphone handsets for popular models including Motorolaâ€™s RAZR and the iPhone. Its revenues have more than quadrupled in the past five years.

In an interview with Fortune magazine in April, Wang claimed that the firmâ€™s â€œhuman resources advantageâ€ is the most important part of its strategy. According to Wang, BYD has thrived through the downturn because it can use Chinaâ€™s abundant, low-cost, tech-savvy skilled workers. In a move down the technological ladder, Wang has cut production costs by replacing expensive Japanese robots with Chinese migrant workers, monitored against strict quality control standards.

And it seems that low-cost Chinese workers beat blue sky-thinking business graduates. After three days of calling the companyâ€™s human resources division at its headquarters in Shenzhen, BusinessBecause reached someone who was willing to talk a little (but did not want to be named).

Asked about the relevance of business degrees to the companyâ€™s needs he said that since most positions are technical rather than managerial, MBA graduates are rarely considered. One of BYDâ€™s core values is to be â€œpracticalâ€, he emphasized. Instead of looking for highly educated people, the company puts its employees through rigorous internal training in engineering, management and languages.

Employees live in BYD-sponsored apartments, eat in BYD canteens, send their kids to BYD kindergarten, elementary and middle schools, and join in organized entertainment activities.

Seems an MBAâ€™s best shot at working for the worldâ€™s most exciting company could be teaching English at the BYD Staff Academy.

China has ALWAYS outsourced certain work to US, such as technology development and marketing/branding. Think about production of goods and service as a value chain; US has a the high value added part (because of the skills) and China has the low value added part (because of abundance of labor).

manly5000 wrote:Wait wait wait... are you saying that China is outsourcing to US?!?!?

An MBA doesn't give anyone practical knowledge of anything. The internal people spend a lot of time covering up for their mistakes. I am glad to see that China is rejecting the Western model of hiring and advancing workers based on worthless degrees rather than competance.